[Published on April 12, 2023 edition of the "Korean Law Insights" column in the Korea Daily’s Economic Expert Section]
In international disputes involving parties in both Korea and the U.S., the issue arises of which court should hear the case. In such situations, it is necessary to make a decision after comprehensively considering factors such as the laws and litigation systems of each country, the debtor’s assets, the ease of participating in the proceedings, attorney fees, and the time required. Above all, I consider “the possibility and ease of enforcement” as a critical factor. Even if a winning judgment is obtained after spending significant time and money, if the opposing party’s assets are no longer available or enforcement is impossible, that judgment becomes worthless. Therefore, securing assets for enforcement in advance through provisional measures or preemptive seizures is extremely important.
However, in international disputes, an even more critical issue than securing the opponent's assets in advance is whether the judgment can be enforced in a foreign country. For example, if a lawsuit is filed in a U.S. court but the judgment needs to be enforced in Korea (such as when the debtor has assets in Korea), the Korean court must recognize that the U.S. court's judgment meets the requirements for recognizing foreign judgments under Korean civil procedure law. These recognition requirements are detailed in Article 217 of the Korean Civil Procedure Act, and numerous Supreme Court precedents address this issue. The most frequently contested issue in this context is the legality of "service" (notification of legal proceedings).
Under Korean civil procedure law, for a foreign judgment to be enforceable in Korea, the opposing party must have been given a sufficient opportunity to participate in the foreign proceedings to ensure their right to defense. Whether this opportunity was adequately provided depends on whether proper service was carried out in accordance with the procedures of the foreign court. For example, if a lawsuit is filed in an LA court against a debtor residing in Korea, and the debtor does not actually appear in the LA court, the Korean court may still consider that the debtor had a sufficient opportunity to participate—provided that proper service was conducted.
The issue is that under Korean civil procedure law, service by public notice (공시송달) or similar methods is not recognized as proper service. Additionally, the Korean Supreme Court has narrowly interpreted the scope of proper service by ruling that supplementary service and service by mail do not qualify as proper service. Supplementary service refers to a method of service where, if the recipient cannot be reached directly, the documents are delivered to a person with sufficient judgment, such as an employee or a cohabitant of the recipient. In contrast, Korean court rulings allow enforcement even when service was conducted through supplementary service. Due to this strict interpretation, the Korean Supreme Court's past rulings have been criticized for making it difficult to enforce foreign judgments in Korea.
However, at the end of 2021, the Korean Supreme Court overturned its previous interpretation and ruled that service conducted through supplementary service can also be considered proper service. As a result, it has become easier to serve legal documents from U.S. court proceedings to parties in Korea using supplementary service, reducing both time and costs. Consequently, the likelihood of enforcing U.S. court judgments in Korea has increased.
Considering that service of process is a procedure that begins at the outset of a lawsuit, if a party is located in Korea or if enforcement against assets in Korea may be necessary, it is crucial to carefully plan from the early stages of litigation in the U.S. This includes ensuring that the judgment can be enforced in Korea and securing assets located in Korea. This is why collaboration with a Korean attorney from the beginning of an international dispute is essential.
▶Inquiries: (424)218-6562
Jin Hee Lee/K-Law Consulting Korean Attorney
[Reference link in original Korean]
Comments